Rescue efforts to reach 60 miners stuck underground continued last night after a second massive power cut in as many days – thought to be the largest outage in history – brought chaos to India.

In developments that triggered a mixture of despair and incredulity, a day after the country's northern grid collapsed on Monday it did so again yesterday, followed shortly afterwards by the collapse of the eastern and north-eastern grids. At one point anywhere up to 700 million people in 20 Indian states, stretching from Kashmir to West Bengal, were without electricity.

Hundreds of trains ground to a halt and traffic lights went out, bringing chaos to many of the biggest cities. Electric crematoriums had to switch to using wood and businesses and hospitals had to rely on back-up generators.

One of the most intense dramas was playing out in the eastern states of West Bengal, where around 200 workers were stuck underground in three mines after the lifts used to bring them to the surface stopped working when the power died. A similar incident occurred in Jharkhand in eastern India where 65 men were trapped.

Yesterday evening it was reported that the 200 miners stuck in Burdwan, around 120 miles north-west of Kolkata, had been rescued. But operations continued in Jharkhand where six of 65 miners trapped at four sites in the Dhanbad area had been rescued. "We are hopeful of evacuating all others soon," Tapas Kumar Lahiry of Eastern Coalfields Ltd told The Times of India.

As with Monday's blackout, which affected around 330 million people, there was no definitive explanation for what caused the collapse of the grid. Politicians engaged in a blame game, with some accusing various states of overdrawing from the national grid.

The Power Minister Sushil Kumar Shinde said the crisis was the fault of states such as Uttar Pradesh (UP), which had taken more than their agreed share. "Everyone overdraws from the grid. This morning I held a meeting with power officials and I gave directions that states that overdraw should be punished," he told reporters. "We have given instructions that their power supply could be cut." The state of UP denied the allegations.

While the Prime Minister's office remained silent about the crisis, many observers noted with irony the announcement that Mr Shinde was to be promoted to the home ministry in a government reshuffle.

The opposition Bharatiya Janata Party said the blackouts were evidence of mismanagement and demanded an apology from the Prime Minister, Manmohan Singh.

Whatever the cause of yesterday's collapse, at its root is India's often-debilitating electricity deficit of somewhere around 12 per cent. So-called load-shedding, the deliberate shutdown of electricity in some areas to avoid total blackouts, is commonplace, especially in rural areas and on the fringes of the cities. Two areas where power cuts are rare are Gujarat and the central parts of Mumbai.

"The cause of this is very well known – the country does not have sufficient power and on top of this demand is increasing very fast. It's a mismatch between demand and supply," said Shahid Hasan, a director of the Energy and Resources Institute in Delhi.

"If you have certain states drawing more than their allotted share then it can trigger this collapse."

In Delhi, the city's metro was again closed and thousands of people were forced to try and make their way home either by car, bus or on foot. By mid-afternoon, roads in many parts of the city were approaching gridlock.

By yesterday evening power had been restored to many parts of the capital, though not all parts of country were so fortunate.

In West Bengal, where inter-city and local electric trains were stopped at stations, the chief minister Mamata Banerjee said it would take up to 12 hours to restore power.

The state's power minister, Manish Gupta, said: "The situation is very grave. We are doing everything to restore power."